You can set the ratio to full or panel. Panel will have black bars on the side while Full will stretch it to fill the screen. It's easier to just get an SD DirecTiVo to handle all SD content. Especially since they are only $80 now. That way the HD-TiVo will only handle HD.

There is a ratio button on the remote. In the settings menu you can set the default to panel or full. If you need to change it from the default you can use the ratio button on the remote. I have my default set to full, in case i go to an SD channel by accident, it will fill the whole screen. The rati button does nothing for an HD channel. Hopefully a future software update will change that and give us the ability to stretch HD content.

Here's what I do to allow my TV to do the stretching of SD pictures. Set the HD DirecTivo to a 4:3 aspect ratio instead of 16:9 (this seems to have no effect on HD material). Also set the HD Tivo to panel mode using the ratio button so the Tivo doesn't do any stretching. Both of these settings can be left in this mode all the time. Lastly, set the HD Tivo to 480i when watching SD content and your TV will stretch the picture assuming you have a digital 16:9 TV. Set it back to 1080i (or 720p if that's what your TV needs) for HD material. This makes the HD Tivo act just like the SD Tivo for SD material.

BTW-I assume setting the HD Tivo to 4:3 instead of 16:9 simply stops the Tivo from adding black side bars to the SD pictures allowing the TV to provide a proper stretching of the picture. If anyone knows better I would appreciate any feedback.

You can change the resolution with the remote. Hit the up button once and it shows you the current resolution. Each time you hit the button after that cycles through the resolutions. In the setup menu you can tell it what resolutions to cycle through. I have mine cycle through 480P and 1080i. You can choice 480i, 480P, 720P and 1080i.

Yes, you need to change the resolution for HD vs. SD programming. Just use the up button as aaronwt said being sure to program it to cycle only through the modes you need (probably just 480i and 1080i). Hopefully the software will be updated in the future so the box simply passes through the native resolution of the programming if you wish.